Incentive was to install loft and wall insulation and more efficient boilers

Energy Secretary Amber Rudd announced scheme will close immediately

It is because of a low take-up and to protect taxpayers from further losses

By Tamara Cohen, Political Correspondent for the Daily Mail

Published: 19:33 EST, 23 July 2015 | Updated: 19:33 EST, 23 July 2015

View comments

Energy Secretary Amber Rudd announced yesterday that the Green Deal scheme would close with immediate effect because of low take-up and to protect taxpayers from further losses

The Government’s flagship scheme to insulate homes has been axed after it was branded a £170million failure.

Ministers set up the Green Deal three years ago to encourage homeowners to save energy by installing loft and wall insulation and more efficient boilers at no up-front cost.

But Energy Secretary Amber Rudd announced yesterday that the scheme would close with immediate effect because of low take-up and to protect taxpayers from further losses.

Miss Rudd said the government was still committed to the goal of insulating homes, and that she would work with the industry to come up with an alternative scheme.

In her first major speech today, she will say that tackling climate change must not be seen as a left-wing issue but a ‘vital safety net for families and businesses’ which can be achieved in a more cost-effective way.

She has undertaken a review of all current energy policies, and cut subsidies for onshore wind and solar power, before turning her fire on the Green Deal which is widely seen as poor value for money.

Which? director Richard Lloyd said the scheme, pioneered by former Lib Dem energy secretary Chris Huhne, had ‘spectacularly failed to take off’.

The Green Deal Finance Company, which delivered, it will close. It offered people loans for up to 25 years to carry out the work, paid back on their energy bills, and has received £59million since 2013.

But take-up was low due to high interest rates, and the fact that loans were attached to a property, like a mortgage, so had to be paid off or passed on to the next owner if the applicant moved.

The Department of Energy and Climate said by the end of last month, around 10,000 properties had installed measures using the scheme.

Another 5,600 which are in progress, will not be affected.

The Green Deal Home Improvement Fund – which offered people cash back ‘vouchers’ for home improvements which householders bought up front – will also shut due to spiralling costs.

Some £114million was allocated for 27,000 energy efficiency measures, an average of £4,200 per job.

When the energy efficiency programme was set up, it was billed as the ‘biggest home improvement programme since the Second World War’ and ministers hoped to eventually reach 14million homes.

But last year MPs on the Commons Energy and Climate Change Committee said take-up had been a fraction of what was expected and called the scheme a ‘disappointing failure’.

Ministers set up the Green Deal three years ago to encourage homeowners to save energy by installing loft and wall insulation and more efficient boilers at no up-front cost

Miss Rudd said: ‘We are on the side of hardworking families and businesses – which is why we cannot continue to fund the Green Deal. It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.’

The government will seek to insulate a million homes by 2020 with a new scheme, she said. Energy companies will still provide energy saving measures to low income households under the ECO scheme.

Labour welcomed the closure of the scheme. Shadow energy minister Jonathan Reynolds said it was a ‘complete and utter failure’.

He said: ‘Installing energy efficiency measures in the home is an important way of getting consumer bills down, but the Green Deal never represented value for money…the Government urgently needs to lay out what plans they have to replace the Green Deal.’

Green campaigners concede the scheme was not a success but Greenpeace said scrapping it without a replacement in place was a ‘false economy’ and accused ministers of ‘giving up on efficiency’.

Energy companies were among the providers of the Green Deal, but one senior figure at an energy firm said: ‘The Green Deal has long been dead, and now needs a decent burial.’